A life estate is the ownership of property/land for the duration of a person's life.
It is a tool that is commonly used in blended families, where one spouse comes to the second (or third) marriage with property that he/she wishes to preserve for his/her own children from a previous marriage. The owner of that property can grant a life estate in the property that ends upon the death of the surviving spouse, when the ownership of the property may pass to the testator’s own children via his/her will.
An example of a common will clause to this effect is as follows:
Life estate in principal residence:
"If my wife, X, survives me, I direct my Trustees to hold whatever real property I may own and which X and I may be using as our principal residence as at the date of my death (the “Property”) as a home for X during her lifetime, or for such shorter period as X desires or as my Trustees in the exercise of an absolute discretion shall consider appropriate. During such time that this Property is used as a home for X:
"(a) The utilities and any other amounts required for repairs and for the general upkeep of the Property shall be paid out of my Estate;
"(b) The taxes, insurance, mortgage payments and any other expenses related to the Property and not otherwise payable by X (the “Expenses”) shall be paid by my Estate; and
"(c) My Trustees shall set aside an amount of money (the “House Fund”) which, in their absolute discretion, is sufficient to pay these Expenses and shall pay these Expenses from this House Fund during the period of time that X continues to reside in the Property, after which time the remainder of the House Fund shall form part of the residue of my Estate.
"Upon the death of X, or if at any time when in the exercise of an absolute discretion my Trustees consider it no longer appropriate to retain such Property as a home for X, my Trustees shall sell such Property and the proceeds of sale shall form part of the residue of my Estate.”
The life estate is a useful tool for spouses in a second marriage who want to ensure that when the property owner passes, the spouse has the ability to remain in their principal residence and not be disrupted or forced to move out.